Virtual Worlds, Innovation, and Geography

One of the most downloaded articles from the journal Innovations is, "A Silicon Silicon Valley? (Virtual Innovation and Virtual Geography)," by Philip Evans. It is a case study of Second Life. There is no abstract but here is a snippet from the text:

[T]he literature on virtual worlds has focused largely on the remarkable and counterintuitive way that they replicate real-world institutions (most notably an economy), and on the low-cost of innovation within such worlds. While surely necessary, neither point is sufficient to make the case for virtual worlds as a platform for real-world innovation. Evidence that the Petri dish nurtures exotic flora is not proof that it will yield us penicillin.

What we really have is an hypothesis: the hope and expectation that because some preconditions known to be important for innovation in the real world can also be satisfied in the virtual, innovations will flourish there that are of value in the real. And there is an extraordinary amount of experimentation going on to test that hypothesis.

Here's the first page. You can download the rest of the pdf for free at that page as well. Do read it.